Survival, Dyson style

LIFE is good for Sir James Dyson. He is a multi-millionaire. He has film star looks. And he is a genius.

But the mention of just one word to the inventor of the bagless vacuum cleaner makes his face cloud over. That word is Malaysia. Despite once taking every opportunity to champion manufacturing in Britain, Dyson suddenly switched production of the bagless wonder from Malmesbury, Wiltshire, to the Far East.

His 500 loyal workers were made redundant and at a stroke his image was tarnished. In some quarters he was branded a hypocrite. At the time he said: 'I was presented with a stark choice - cling to a dream and go out of business frighteningly soon, or eat humble pie and survive, hopefully to prosper and create more jobs in Wiltshire.'

It is obvious that the whole episode still causes him pain. 'It was a very difficult and sad decision,' he says. 'Sad because we had to let our people go.'

One suspects it was also sad because he was forced to yield the moral high ground, with the result that his thoughts about manufacturing in Britain counted for a lot less. But after taking the battering, Dyson would be only human if he were to point to his opponents and say: 'I was right'.

Results revealed to the Financial Mail on Sunday show that pre-tax profits more than doubled to £43.6m in the year to last December on sales of £277m. Dyson says that pre-tax profit per employee in 2003 tripled as a result of the move to Malaysia.

'That move has put us on a new economic footing, strengthening the business,' he insists.

The move will also put the company in a powerful position to meet the expected surge in demand from America and Japan for his vacuum cleaners.

Dyson has high hopes for America, where his vacuum cleaners have been on sale in 3,000 shops over the past year. By next year, the cleaners should be available in 10,000 outlets.

The potential for sales in the US is staggering. Last year, Dyson sold 210,000 cleaners there, bringing in £34m in sales. Next year's turnover is expected to hit £100m.

Before the Malaysian move, Dyson, 56, was courted by Downing Street and was caught up in the embarrassing Cool Britannia campaign. Two years on, the company is starting to take on more hi-tech research and development workers. More than 160 better-paid jobs have been created at Malmesbury, where washing machines are still made.

Dyson looks much happier: 'We have plans to expand and hope to have created as many new jobs here as we had to lose.'

He warms to the theme that one day manufacturing will come back entirely to Wiltshire as labour costs in the Far East start to accelerate. 'The cycle will be complete,' he says.

Whatever the pain of moving manufacturing to South East Asia, it has done no harm to his bank balance.

Dyson and his family own all the company so the £15m he paid for Doddington Park, a stunning 300-acre Georgian estate in Gloucestershire, will hardly be missed from his £860m fortune. He also owns a more modest £3m home in the South of France and a house in Chelsea.

But Dyson tells you with a straight face that money is not important to him. 'Look, you ask me about my money,' he says. 'Honestly, I don't even think about it. It is not my motivation.'

Dyson, who studied design at art college, adds: 'I started Dyson because I love bringing out new products and designing technology. It wasn't because I wanted to exploit the company to make a personal fortune.'

After years working on thousands of prototypes, he launched the bagless vacuum cleaner in 1992. Two years later, it was a best-seller and Dyson was on his way to a fortune. During those hard times, his artist wife Deirdre, whom he met at college, took on the task of raising their three children.

Dyson's latest plan is an affordable robot vacuum cleaner. 'We want ours to be a true alternative to manual vacuuming.'

If it works, Dyson would earn the gratitude of a nation -- and people might just start to forget Malaysia.

Fortune after 15 years of toil in the cellar

DESIGN is in the blood of the former art college student.

After developing the Ballbarrow wheelbarrow and a water-filled plastic garden roller, his mind turned to vacuum cleaners while renovating his house in the Cotswolds.

Over 15 years working in his cellar, James Dyson developed 5,127 prototypes before finally launching the Dyson Dual Cyclone bagless vacuum cleaner in 1993. In two years, it became a best-seller in the UK.

As well as cleaners, Dyson has applied for more than 1,100 patents on 175 inventions. He takes patents seriously. After his years of toil with the vacuum cleaner, copycats moved in. In 1999, Hoover tried to imitate a Dyson and he sued. Hoover had to pay £4m compensation.